Chevron 2025 Q2 Earnings Misses Targets as Net Income Falls 43%

Chevron (CVX), ranking 36th by market capitalization, reported its fiscal 2025 Q2 earnings on Jul 31st, 2025. Chevron's adjusted earnings per share (EPS) surpassed Wall Street expectations, coming in at $1.77 compared to the consensus estimate of $1.76. However, the company reported a decline in net income, which fell to $2.52 billion from $4.44 billion a year earlier. This performance was largely attributed to lower crude oil prices and a one-time net loss related to the fair value measurement of Hess shares. Despite these challenges, Chevron maintained robust cash flow from operations and provided strong guidance for future production and cash flow growth, driven by its acquisition of Hess Corporation.

Revenue

Chevron's total revenue for 2025 Q2 decreased by 11.6% to $44.91 billion, compared to $50.78 billion in 2024 Q2. The sales and other operating revenues amounted to $44.38 billion. Income from equity affiliates contributed $536 million, while other income recorded a loss of $89 million. In total, revenues and other income reached $44.82 billion.

Earnings/Net Income

Chevron's EPS declined 40.3% to $1.45 in 2025 Q2 from $2.43 in 2024 Q2, with net income dropping 43.4% to $2.52 billion. The significant decline in EPS reflects weaker oil price realizations impacting overall profitability.

Price Action

The stock price of Chevron has edged down 0.24% during the latest trading day, has edged down 2.69% during the most recent full trading week, and has climbed 5.90% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Chevron (CVX) shares after a quarter-over-quarter revenue increase on the earnings release date, and holding for 30 days, yielded moderate returns but underperformed the benchmark index. With a compound annual growth rate of 11.01%, this approach lagged behind the benchmark by 17.61 percentage points. Despite exhibiting a low-risk profile, evidenced by a maximum drawdown of 0.00% and a Sharpe ratio of 0.40, the strategy demonstrated significant volatility with a rate of 27.37%. This volatility indicated substantial price fluctuations, making the strategy less appealing for risk-averse investors. The results suggest that while there may be opportunities for gains, the risks and market volatility associated with Chevron shares must be carefully considered.

CEO Commentary

“Second quarter results reflect continued strong execution, record production, and exceptional cash generation,” said Mike Wirth, Chairman and CEO of Chevron. He highlighted the increase in Permian Basin production to 1 million barrels of oil equivalent per day and new records in both U.S. and worldwide production. Wirth emphasized that cash flow from operations reached one of the highest levels in company history at similar commodity prices. He noted that the acquisition of Hess strengthens Chevron’s diversified portfolio, enabling the company to extend its production and free cash flow growth well into the next decade.

Guidance

Chevron anticipates continued growth in its production and free cash flow profile, driven by the integration of Hess Corporation’s assets, including those in Guyana, the U.S. Bakken, and the Gulf of America. The company aims to maintain its strong cash flow generation and return of capital to shareholders, indicating confidence in its operational strategies and market positioning.

Additional News

Chevron completed the significant acquisition of Hess Corporation in July 2025, enhancing its asset portfolio with key additions in Guyana, the U.S. Bakken, and the Gulf of America. This strategic move is expected to bolster Chevron's production and cash flow growth well into the next decade. Alongside the acquisition, the company announced the appointment of John B. Hess to its Board of Directors, reinforcing Chevron's leadership team. Additionally, Chevron's board declared a quarterly dividend of $1.71 per share, payable on September 10, 2025, underscoring its commitment to returning capital to shareholders. These developments highlight Chevron's strategic focus on growth and shareholder value.